On Tuesday, the price of a barrel of oil fell to $57, a record five and a half year low for global Brent oil rates. In the meantime, the oil industry is worried about an excess supply of oil as well as disruptions in Libya, which is hampering oil production. The Brent figure for delivery in the month of February was $57.32for a moment, after touching a low of $57.25 at the beginning of the session. The $57 figure is the lowest seen since May 2009.Both the US crude and the European benchmark will experience their biggest percentage declinations since 2008.
US oil data reports an indication of things to come!
At present, traders are watching the US weekly supply data very keenly. The American Petroleum Institute, an industry forum, will be releasing its report very soon on the issue in addition to the release of fresh data on Wednesday by the Energy Information Administration of US Department of Energy. According to Michael McCarthy of the CMC Markets, “A potential surprise draw in U.S. oil stocks would give a short-term fillip to the upside,”
Crude inventories to remain high in the United States
It is being said that crude inventories for the United States, the world’s biggest oil consumer, will continue to remain at their present high levels, with US stockpiles estimated to hover around 387.2 million barrels. According to Ken Hasegawa of Tokyo’s Newedge Japan, in the next few months the US crude figure could see a drop to $50 a barrel. On the basis of its wave pattern as well as Fibonacci projections and investigations, US oil is expected to touch the $52 mark. Brent, on the other hand, could fall to $55 a barrel, according to Ken Hasegawa.